How do you include the change in value of an investment account (stocks, bonds) for an S Corp on the Balance Sheet, P

[EliasTax]

S Corp's 1099 shows cap gains of $1,789.  Investment account started with $9k and shows a value of $9,978 at year end.  How do I show the drop in value of $811 on the return?  Does Sch L need to show the $9,978 or can it just show $10,789?

[IRonMaN]

You don't show a drop in market value.  You only show a drop when they actually sell the stuff.

[qbteachmt]

You might want to read this article:

https://www.investopedia.com/ask/answers/04/021204.asp

[Elias Tax]

Totally get that.  But if I'm showing a book basis balance sheet for the S Corp, does the value of their investment account at 12.31.20 need to tie to their statement or should it just reflect the original investment plus cap gains according to the 1099 they received?

[Elias Tax]

Totally get that.  But if I'm showing a book basis balance sheet for the S Corp, does the value of their investment account at 12.31.20 need to tie to their statement or should it just reflect the original investment plus cap gains according to the 1099 they received?

[Elias Tax]

Here's a great article that sums up the issue and states that the offset to the market value entry goes to equity as Unrealized Gain/Loss.  

https://www.investopedia.com/ask/answers/061715/how-do-marketable-securities-impact-companys-financi...